Crude-oil prices were up Tuesday, with U.S. benchmark WTI holding above $100 a barrel and with the Federal Reserve meeting later firmly in focus.
Michael Poulsen at Global Risk Management said volatility in oil prices is expected around the time of the Fed's new Chairwoman Janet Yellen's speech later in the day.
Market participants will be looking out for any indication of a scaling down in the planned tapering of the Fed's bond-buying program, he said.
March Brent crude on London's ICE Futures exchange was up 50 cents at $109.12 a barrel. On the New York Mercantile Exchange, light, sweet crude futures for delivery in March were up 34 cents at $100.40 a barrel.
Oil prices have been kept high by the cold winter in the U.S. and production outages, but that could change in the coming months if the Organization of the Petroleum Exporting Countries doesn't act to balance supply with demand, said Barbara Lambrecht at Commerzbank.
According to data released by Platts, a division of McGraw Hill Financial Inc., OPEC production rose by 150,000 barrels a day in January, to 29.87 million barrels a day.
"The coming months could see oil supply from Libya and Iran returning to the market, in which case OPEC would be producing much more oil than is needed," she said in a note to clients.
The producing group's main contributor may need to adjust.
"We anticipate that Saudi Arabia will scale back its oil production so as to prevent any price fall, meaning that the oil price is likely to remain within its familiar trading band," said Ms. Lambrecht.
Recently, the ICE's gas oil contract for February delivery was up $2.25 at $923.25 a metric ton, while Nymex gasoline for March delivery was up 169 points at $2.7417 a gallon.
